US firms eye JV to produce perchloroethylene in China

Updated: 2011-03-30 09:33
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CHICAGO -The Dow Chemical Company and Befar Group Co Ltd announced a memorandum of understanding (MOU) on Tuesday to produce a key refrigerant chemical in China.

The Midland-based company said in a statement that the new 50- 50 joint venture will produce perchloroethylene, a key building block material for non-ozone depleting refrigerants used in industrial, automotive, consumer, commercial, building and construction, and other applications.

According to the MOU, the two companies will explore development of a new, world-scale, perchloroethylene manufacturing facility in Binzhou, Shandong province, China.

The new factory is expected to produce 40 kilotons per year at the initial stage, with the possibility of doubling production to 80 kilotons later.

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Dow and Befar estimate production would start in 2014, if the deal is subject to government approvals.

Dow President of Chemicals & Energy, Carol Williams said in the statement that the proposed joint venture with Befar is another critical milestone toward fulfillment of the company's business strategy, and it will allow Dow to grow its manufacturing presence in China, and also increase its ability to meet the world's rapidly expanding need for more sustainable product offerings.

According to the statement, the market for perchloroethylene is growing rapidly in Chin but local supply has been limited so far. The proposed Dow-Befar joint venture is designed to meet this significant market opportunity.